The Bitter Truth About Sugar Tax!

“Tax on sugar sweetened beverages is both anti-worker and anti-poor. It is also the wrong solution to our health problems,” declared Alfredo Marañon, national president of the Federation and Cooperation of Cola, Beverage and Allied Industries (FCCU), during a picket in front of the Senate this morning. “Worst, it could do more harm than good to our overall economy,” he added.

Rather than impose excise taxes that could leave workers jobless, the FCCU said that it could be more effective for government to invest on long-term solutions such as education campaign and regulating advertising on sugar-sweetened beverages.

Citing a study carried out by the the University of Asia and the Pacific (UAP) in 2016, the FCCU warned that, if passed, the supposed gains of TRAIN could be offset by its negative impact. According to the UAP, the economic impact of the proposed P10 per liter tax on SSB revealed that it will lead to a PHP 63 billion economy-wide loss due to reduced government revenues, job losses and economic contraction.

It should be noted that the DOF expects to collect PHP 47 billion from excise taxes in SSB.

Tax on sugar sweetened beverages is patently anti-poor,” Marañon said. According to a survey conducted by the DOF itself, the implementation of House Bill 5636 or the Tax Reform for Acceleration and Inclusion (TRAIN) Act could push the prices of sugar-sweetened beverages by two percent to as much as 140 percent.

“While the poor will have to pay an extra PHP 3 for every powdered drink sachet they take, the rich can continue to have their tax-free sugar fix in their expensive coffee shops,” he added.

Tax on sugar sweetened beverages is patently anti-worker,” Marañon reiterated. In its study, the UAP projects that at least 133,750 direct and indirect jobs will be affected. This would include sugar workers, coffee farmers and workers in the beverage manufacturing.

In a workers’ dialogue with the DOF held in Davao City yesterday, 2 major beverage companies announced that they may be forced to layoff thousands of workers. One company said it may have to shut down 9 plants. Another company announced it may have to impose a moratorium on their collective bargaining agreement.

The figure cited by the UAP study could be a low estimate. The Beverage Industry Association of the Philippines (BIAP) claims that “over 1.3 million micro-entrepreneurs operating carinderias and sari-sari stores all over the country” will also be affected. It is said that 40% of revenues of carinderias are derived from beverage sales.

“There are better ways to address the country’s health concerns,” Marañon said. Studies abroad shows that investing on massive public education campaign, regulating advertising on sugar-sweetened beverages, and even implementing simple solutions that could “nudge” consumers to reduce consumption – like promoting use of smaller containers – could be far more effective solutions than what President Duterte’s TRAIN wants.

The FCCU is a nation union of workers in the beverage industry. It is affiliated to the Sentro ng mga Nagkakaisa at Progresibong Manggagawa (SENTRO) and the International Union of Food Workers (IUF).

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